Smart Management

Keeping Secrets

Regardless of real-world pressures, data should be made public. Absent
good information, bad information will prevail.

There are times when we worry that our column may sound naive. We picture you out there reading our words, shaking your head and muttering, "If they only had to do my job for a month, then they'd really understand what it's like to manage a government."

Actually, readers have said something like this to us on several occasions. After a recent column in which we cited Texas as a model state for its work in validating performance data, we got a note from a state official in Iowa. She softened us up by agreeing with our comments--in principle. Then she lowered the boom: "Now, where do we find the cash, staff, time, etc. to do the job?" she wanted to know. "The revenue in Texas, and therefore the budget, is huge compared to ours. Does that mean governments with less money don't push forward?"

Questions like this come up all the time when a vision of good government management meets real-world managers. And sometimes that meeting takes the form of an outright collision, especially when it comes to making budget or economic data public.

Not so many years ago, we were visiting the budget office in a large midwestern municipality. We had criticized that city in print for a long-delayed year-end financial statement. When we asked them directly why this had happened, one budget official closed the door. Then, the chief finance officer began an explanation using the same tones one usually reserves for conversations with six year olds.

The city, we were told, was in the middle of labor negotiations when the report was supposed to come out, and the report was going to show an unanticipated surplus. Thus, budget officials there thought it only sensible to delay release of the news for a while; at least until after the new contracts had been signed. As far as they were concerned, this was the kind of good management that ivory-tower academics and journalists don't know about.

One case in point that comes up all the time is connected to long- term revenue projections. Many cities and states project their revenues for five or so years. We've long argued that these projections should be made public. We think it's important to keep the citizenry and other stakeholders informed. And we're backed up by many of the authorities who study this kind of thing. "Democracy requires that citizens know the information on which leaders are making their decisions," Bob Berne, vice president for academic development at New York University, told us recently. "They weren't elected to make decisions as to what information to give out. If the public doesn't know the information on which to judge them, you're starting to lose the sense that it's a democracy."

Sounds sensible. But then, when we asked a budget officer in Boston why that city doesn't make its long-term forecasts public, she also spoke sensibly. Many potential users of these numbers simply don't know how to utilize them properly, she said. "Estimates become softer the further out that you go. And people don't necessarily understand that forecasting that far out is subject to change."

Interestingly, Detroit didn't make its long-term forecasts public until very recently. They were kept under wraps in part because of fear that they would make labor negotiations difficult. "There's something of a concern when you put in these five-year projections and make them public," a Detroit official told us last year. "If you're assuming that payroll is increasing 3 percent, that becomes the floor for labor negotiations."

In a city with an often-acrimonious labor environment, it's hard to argue with that logic. But in the past year, Detroit started to make its forecasts more public. Why? Because new casinos opening in the city led some in the city council to believe that there was a huge new pot of cash to be tapped. Executive branch officials wanted to disabuse them of that notion. One way to do that has been to go public with their previously internal-eyes-only predictions.

On reflection, all of these pros and cons lead us to think that regardless of real-world pressures, more information is better than less information; and making information public is better than keeping it private. Sure, data can be misused, misunderstood and even abused. But rather than hiding it in the recesses of the statehouse or city hall, the challenge is to put the information on the table, explain it thoroughly and hope for the best. And, in fact, as Detroit leaders have now recognized, this isn't so naive after all. In the absence of good information, bad information will prevail.

"Put in that position, people will turn to other forecasts that may not be as credible," says Charles Curry, Austin's budget director. He points out that a city's forecast is just one among several. "We just try to make ours credible, so the council won't feel they have to turn to one of the others," he says. "Information isn't going away just because you don't produce it."